There are two things that I have not been able to figure out about the following report of a talk given by the founding head of the University of Chicago’s Department of Political Economy, J. Laurence Laughlin, against the bank-deposit guarantees promised in the 1908 Democratic Party Platform: (1) what was the point of his joke about the black man and the razor and (2) does “Shivers” refer to a person’s name or does it refer to the physical “shivers” of nervous bank depositors? William Jennings Bryan, the Democratic candidate in the Presidential election of 1908, is clearly Laughlin’s target.
Image Source: From the election of 1908. Davenport, Homer, 1867-1912, “William Jennings Bryan, bank deposits, political cartoon,” Nebraska U, accessed December 16, 2019.
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Shivers Bryan Bank Plank
Chicago University Financial Expert Declares It Chimerical.
Points Out Its Injustice
Guaranty of Deposits Is Described as a Socialistic Scheme.
Prof. J. Laurence Laughlin, head of the department of political economy of the University of Chicago, who is a national authority on monetary matters, took another hard rap yesterday at the democratic plank for the guaranty of bank deposits.
In concluding his statements, which were made in Cobb hall at the university, the economist declared his opinion about the democratic plank was epitomized by the story of a negro who went into a shop to buy a razor.
“The negro,” said Prof. Laughlin, “was asked if he wished a common razor or a safety razor. “
‘No, sah,’ returned the negro, ‘I just want one for social purposes.’ There you have the bank deposits guaranty idea.
“No one,” continued the speaker, “is so senseless to promote an immediate fund to secure all deposits. It is purely chimerical. Immediate redemption in cash is impossible, especially in any serious crisis since there is no ready money.
Would Work in Insane Asylum.
“The 1907 panic would have spread far and wide if this guaranty of deposits had been in effect then. This guaranty would have been a mere bagatelle. The proposal shows mere ignorance in asking absolute security—just as if any one in this world could give absolute security.
“It is just as well to ask a clergyman on becoming a pastor of a church to guarantee that every member of his flock will not tell a lie, be guilty of any misconduct or go to everlasting damnation,
“It is like A robbing B and going up on the hill to rob C so that B could be reimbursed. In this way C would have to pay for all the deviltry in town. Yes; the bank deposits guaranty would work perfectly-in an insane asylum.
Safety in Bank’s Integrity.
“Do these advocates really know what they are talking about? Good banks can’t prevent bad banks from making poor loans. They can’t stop the initial loans. Why, it would be worse than a disease.”
Source: Chicago Tribune, 7 October 1908, p. 5.
Image Source: Caricature of J. Laurence Laughlin in the University of Chicago yearbook, Cap and Gown, 1907.
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